Florence officials say midyear revenue tracking but flag personnel, overtime and one-time anomalies
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Summary
At a Jan. 13 work session, town staff told Florence leaders that midyear FY26 revenues are tracking near budget after recent receipts but warned personnel costs, overtime and accounting changes—such as a new fleet internal service fund—could push expenditures slightly over forecast.
Town staff told the Florence Town Council on Jan. 13 that midyear revenues for fiscal 2026 are tracking close to budget but that several expenditures and accounting changes require close monitoring.
Finance staff reported that, after updated receipts, the town had collected about 49.2% of budgeted revenues by December, up from the 47.4% figure shown in earlier packets. Staff noted a possible “San Tan effect” after neighboring San Tan Valley received vaccine-like-ticket (VLT) and HEERF distributions that could change how state-shared revenues flow to Florence. “We did budget conservatively on state share knowing that San Tan was probably gonna happen,” a staff presenter said during the review.
The presentation highlighted that about seven major revenue streams make up roughly 83–85% of total revenue and that property taxes, building permits and state-shared sales and income taxes are timing-dependent. Interest income was reported as down year-over-year as interest rates begin to fall.
On the expenditure side, staff flagged personnel as the largest general-fund cost, at about 41% year-to-date, and called out higher overtime in the fire and police departments tied to training and FMLA coverage. Third-party engineering fees were also identified as an area to watch. Staff warned that, while current trends would keep the town near budget, projecting last year’s spending rates forward could put the town slightly over in FY26.
Council members and staff also clarified an accounting change: the town created an internal service fund for fleet operations this year, shifting what had been Streets Department expenses into a centralized fleet fund and driving unusually large transfer percentages year-to-date. That reclassification, staff said, explains a spike in transfers and should normalize as interfund billing proceeds.
Resident Les Buckner, speaking during the public comment period preceding the presentation, urged clearer presentation of variances and recommended adding a high-level overview that drills down into detailed tables. Buckner also asked whether the budget projections include any expected revenue tied to Florence Copper; staff said that question required follow-up.
The council and staff agreed to monitor state-shared receipts next month, when additional sales and transaction privilege tax allotments are expected, and to revisit any adjustments to the forecast once those figures are final.
